it's comforting to think that understanding the "language" of finance would have protected us. I also think it's comforting to think that this was the work of simply some greedy guys on wall street using strange words.
underlying all these instruments was the assumption that americans have never defaulted on home loans over historical norms, and even in the worst case assumption, still wouldn't be that bad.
this assumption was the bet implicit in every mortgage backed issuance. the names and the details are actually not as relevant - this basic concept was. perhaps that is why the author still struggles to understand - he's looking in the wrong direction.
this author writes of the greed of bankers who want to one-up the next guy, but when it comes to homeowners, are they not equally guilty of wanting to one-up the next guy with a bigger house, a quick flip, a granite countertop, or a cash-out refi?
underlying all these instruments was the assumption that americans have never defaulted on home loans over historical norms, and even in the worst case assumption, still wouldn't be that bad.
this assumption was the bet implicit in every mortgage backed issuance. the names and the details are actually not as relevant - this basic concept was. perhaps that is why the author still struggles to understand - he's looking in the wrong direction.
this author writes of the greed of bankers who want to one-up the next guy, but when it comes to homeowners, are they not equally guilty of wanting to one-up the next guy with a bigger house, a quick flip, a granite countertop, or a cash-out refi?